Switzerland’s reputation as a secretive tax haven looks set to end following the introduction of rules over sharing bank account data.
The International Convention on the Automatic Exchange of Banking Information (AEOI) entered into force on January 1, pulling Switzerland in to line with international standards on taxation.
The convention, developed by the Organization for Economic Co-operation and Development and the global financial industry, states that financial information on Swiss bank accounts held by citizens of certain countries will in future be shared annually and on an automatic basis.
In the past, Switzerland would only provide banking information if requested by a limited number of countries and even then, full co-operation was not guaranteed.
The regime came under international pressure in 2008 after the U. S. Federal Bureau of Investigation (FBI) probed a multi-billion dollar tax evasion case involving the Swiss bank, UBS.
According to the Swiss State Secretariat for International Financial Matters, Switzerland will now start collecting data on 1 January 2017 and exchange it for the first time in 2018.
The secretariat said the new standard makes provision for the mutual exchange of information. So Swiss institutions will now also receive yearly updates on the bank account details held by its citizens in other countries.
“Aside from Switzerland, almost 100 states, including all major financial centers, have declared their intention to adopt the standard,” the Swiss secretariat said on its website.
The Swiss parliament approved the deal in 2015 and the treaty was ratified in 2016.
According to Swissinfo.ch the data can only be used for tax collection efforts and cannot be made public.